The profit made from the sale, trade, or exchange of a capital asset.
This is measured as the difference between its selling price and the original cost. An investment that has been sold at a profit is known as a realized capital gain, and one that has increased in value since the time of purchase so that if resold would result in a profit but has not yet been resold is known as an unrealized capital gain. Capital gains may be either short term (a year or less) or long term (more than a year), the period beginning the day after acquisition and ending the day of disposal. Capital gains are taxed with income, long-term capital gains usually at a lower rate than income as an attempt to encourage entrepreneurship and investment in the economy.
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